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Accounting Software Loved by Small Business Owners - Our Top 5 Picks

Individuals and business owners use accounting software to track their accounts and record revenue and expenses. It is particularly important for small businesses because it is more efficient and produces fewer errors than manual processing. It can also save time because of features like automation, and it provides a secure location for the owner to store essential documents and receipts that can be accessed at any time.


Route Accounting software is utilized by 64.4 percent of small business owners, which is promising given that 60% of small business owners claim to have no financial or accounting skills. Read on to find out which accounting software is best for your small business if accounting isn't your strong suit, or even if it is and you want to save time.


We looked at over 20 tools and applications to find the best accounting software for small businesses before settling on the top eight. We chose them based on the features and functionalities tailored to small business owners, as well as their ease of use, pricing, and other factors.


2021’s Best Manufacturing Management Softwares

  1. QuickBooks - Best Overall Accounting Software

  2. Fresh Books - Best Invoicing

  3. Wave - Most Affordable

  4. Xero - Most User-Friendly

  5. QuickBooks Self-Employed - Best for Freelancers


Intuit QuickBooks Online

When you hear the phrase "small business accounting software," Intuit Quickbooks may be the first thing that comes to mind — and with good reason. The program distinguishes itself from the competition with features such as receipt capture and live chat help available 24 hours a day, 7 days a week.


It also includes PayPal, Shopify, and Square interfaces. These features, along with a few more, combine to make Quickbooks a popular small business accounting software.


All plans include features such as tracking income and expenditure, sending invoices and receiving payments, running reports, sending estimates, tracking sales and taxes, and capturing and organizing receipts. Advanced plans include inventory tracking, time tracking, and full-service payroll.


Pros

  • Scalable

  • Frequently used by accounting experts.

  • Third-party application integration

  • Cloud-based

  • App for mobile devices



Cons

  • More users demand an upgrade.

  • Syncing issues with banks and credit cards occur from time to time.


FreshBooks

FreshBooks' combination of excellent features, customizable invoices, and well-reviewed mobile apps makes it ideal for freelancers. FreshBooks allows you to send an unlimited amount of invoices and estimates with each subscription. Each package also offers time monitoring to make paying clients easier and more accurate.


FreshBooks' built-in small-business expense tracking can help you stay on track with your finances. FreshBooks, like QuickBooks Online, has built-in mileage monitoring, which is essential for freelancers who want to claim mileage charges on their year-end tax returns.


Pros

  • Cloud-based

  • Interface that is simple to use

  • Integration with third-party apps

  • Affordable

  • Features for advanced invoicing


Cons

  • There is no inventory management available.

  • There is no payroll service.

  • There are several limitations to the mobile app.



Wave

Wave is a powerful accounting software for small businesses and freelancers. It prioritizes ease of use and synchrony, allowing you to effortlessly link your bank accounts, manage your expenditure, and balance your books. If you choose to invest in Wave's other amenities, it also aligns with their additional resources, giving you an all-in-one solution.


Wave offers a clean, user-friendly dashboard and a bevy of features that equal its paid counterparts for exactly $0 a month. Wave Accounting, for example, offers multi-currency compatibility, cost monitoring, unlimited invoicing, and double-entry accounting, which is something FreshBooks' basic business accounting plan lacks.


Pros


  • Accounting, invoicing, and receipt scanning are all free.

  • There are no transaction or billing limitations.

  • Multiple businesses can be run from a single account.

  • The number of users is unrestricted.

  • App for mobile devices


Cons


  • There are just a few third-party app connectors.

  • Credit card and ACH payments have higher costs.

  • Only 14 states offer full-service payroll.

  • There is no inventory management.


Xero

We like Xero because of its extensive functionality and affordable starting price. Xero allows you to send bespoke invoices, reconcile bank transactions, capture receipts for easier record-keeping, and track inventory for just $11 each month.


Xero, on the other hand, stands out as a small-business accounting software in terms of collaboration. Xero's accounting and inventory software solutions enable unlimited users, unlike practically every other accounting solution (including QuickBooks and FreshBooks). Delegating functions like bank reconciliation or cost tracking to another team member is included in your fee, so you don't have to pay extra.


Pros


  • Cloud-based

  • App for mobile devices

  • App store for third-parties

  • Inventory management that is simple



Cons


  • Reporting is limited.

  • Fees charged for ACH payments

  • Customer service is limited.


QuickBooks Self-Employed

For part-time freelancers and independent contractors who primarily want to manage their income and spending for their tax return, we recommend QuickBooks Self-Employed accounting software. This program is for small business owners who file a Schedule C on their personal tax returns.


Without employing software like this to track company activities, freelancers would have to sift through all of their bank and credit card statements at the end of the year to tally up their income and spending, which can be time-consuming. All business transactions will be automatically totaled by QuickBooks Self-Employed.


The mobile app makes it simple to log miles and take images of receipts for business expenses while driving. Most accounting software does not distinguish between business and personal transactions, but QuickBooks Self-Employed has a function that allows you to label each transaction as either business or personal.


Pros


  • Cloud-based

  • App for mobile devices

  • Keep track of your miles.

  • Make a distinction between business and personal expenditures.

  • It synchronizes with TurboTax.


Cons


  • Data is difficult to transfer to other accounting software.

  • Reporting is restricted.

  • Customization and limited invoicing functionality

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